The lender’s Mitsubishi UFJ Trust and Banking Corp. unit
will acquire a stake in Butterfield, which services the
alternative asset investment industry, from BV Investment
Partners, according to a statement from the seller. Financial
terms weren’t disclosed, Butterfield said on its website.

Mitsubishi UFJ is accelerating overseas takeovers to offset
muted corporate borrowing and loan profitability in Japan. The
Butterfield deal marks the financial group’s first acquisition
of a hedge fund asset administrator, according to Yasufumi
Tominaga, a Tokyo-based spokesman for the trust bank.

“Hedge fund administration generates higher fees than the
comparable business for mutual funds and is a growth area given
the new and more onerous filing requirements,” Makarim Salman,
an analyst at Jefferies Group LLC in Tokyo, wrote in a report
today. “Post-merger they will be adding banking, custody,
trust, foreign-exchange and securities-lending services,” said
Salman, keeping his buy rating on Mitsubishi UFJ.

Butterfield Fulcrum provides administrative services for
more than $100 billion of client assets across 850 funds
including hedge funds, fund of funds, private equity and real
estate, according to the Bermuda-based firm’s website. It has
seven offices in six countries with more than 325 employees.

Asset Management

“The acquisition is in line with our group’s strategy to
expand asset management and administration businesses not only
in Japan but overseas,” said Tominaga of Mitsubishi UFJ Trust,
“It will bring us several billions of yen of profit annually.”

The Nikkei newspaper earlier reported that the amount would
be around $30 billion yen ($309 million), without saying where
it obtained the information. Tominaga declined to comment on the
buyout price.

Most recently, Mitsubishi UFJ announced in April that it
will buy $3.7 billion of U.S. real-estate loan assets from
Deutsche Bank AG through its San Francisco-based UnionBanCal
Corp. to boost commercial lending.

Mitsubishi UFJ’s expansion abroad isn’t without
complications. Its Bank of Tokyo-Mitsubishi UFJ Ltd. lending
unit agreed to pay $250 million to settle claims it transferred
billions of dollars for countries facing U.S. sanctions, the New
York State Department of Financial Services and New York
Governor Andrew Cuomo said in a statement yesterday.